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This Time, Slump Hits Well-Educated, Too

Norm Elrod, 36, of Queens, center, has been unemployed since October, despite an M.B.A. A lot of people are in a lot worse shape than I am, he said.Credit
Béatrice de Géa for The New York Times

Getting a master’s degree in business was supposed to be Norm Elrod’s ticket to upward mobility and a stable career. But it has not worked out that way for him, or for a fast-growing number of other highly educated New Yorkers.

Mr. Elrod, 36, lost his job as a manager at an online marketing firm in October and has been looking for work ever since. In that quest, he has joined more than 35,000 college graduates who are collecting unemployment benefits in New York City.

This recession is throwing the city’s most educated workers out of their jobs at a rapid rate. And while unemployment rates remain higher for workers with less education, the gap is quickly narrowing. In the past year, the number of city residents with at least a bachelor’s degree who are collecting unemployment benefits has risen about 135 percent, an analysis of state labor statistics shows — nearly twice the rate of increase for people who did not finish high school.

“We have not seen this in prior recessions where there’s been such an increase in well-educated people turning to unemployment insurance,” said James Parrott, chief economist for the Fiscal Policy Institute in Manhattan. “It’s an uncharacteristically well-educated group.”

The trend is occurring nationally, though it is more pronounced in New York City. Nationally, the number of unemployed people with college degrees doubled in the last year, rising by more than one million in the 12 months through March, according to a report released on Friday by the federal Department of Labor.

The surge in layoffs of professionals buttresses the view of some economists that the metropolitan area may not be able to pull itself out of recession quickly. One reason is that employers have been increasingly reluctant to fill high-paying positions that offer full benefits, said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

Several forecasts for the local economy also project that the financial services industry, which powered the city’s recent growth, will continue to shed jobs long after other businesses rebound. The city’s Independent Budget Office projects that employment will decline through the first half of next year, but that the local finance sector will keep shrinking until 2011.

Alexandra M. Ben Othman, 28, was dismissed from her position as an editorial assistant for a Manhattan textbook publisher on March 2. A 2004 graduate of Rochester Institute of Technology, she has deferred repayment of her school loans. Many of her friends, including accountants, photojournalists and a lawyer, have also lost their jobs, she said.

“It’s really bad,” said Ms. Ben Othman, who lives in Sunnyside, Queens. “There’s nothing out there right now.”

Indeed, the recession’s effects have clearly rippled out from Wall Street to other professional services, like law, accounting, advertising and architecture. Some economists say they expect those cutbacks to lead to still more layoffs among lower-wage and blue-collar workers as incomes decline and spending slows.

“It’s both a ripple out and a trickle down,” said Rae Rosen, a senior economist at the Federal Reserve Bank of New York, citing estimates that each job on Wall Street produced two or three other jobs in the metropolitan area.

That statistic, known as a jobs multiplier, works in reverse too, said Jeffrey B. Wenger, an associate professor of public policy at the University of Georgia. Less educated workers usually continue losing jobs for months after employment rebounds for college graduates, Mr. Wenger said.

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New York City’s unemployment rate jumped to 8.1 percent in February from 6.9 percent in January, its biggest change in any single month on record. That rise ended a period of more than a year when the city’s job market had appeared to be healthier than the nation’s.

As fast as unemployment appears to be rising among the most educated, the official count may still be understating how bad the situation is at the high end of the pay scale in New York, Ms. Rosen said. Many of the financiers and other professionals who have been laid off may not be collecting unemployment because they are still receiving severance payments from their last employers, she said.

But others, like Mr. Elrod, have not been so fortunate. A resident of Jackson Heights, Queens, he has been collecting the maximum weekly benefit of a little more than $400 a week since he was fired in October, he said. Through a blog he created, www.joblessandless.com, he has heard from dozens of other professionals struggling to find work, he said.

“There’s a lot of frustration out there,” he said. “A lot of people are in a lot worse shape than I am.”

Mr. Elrod said that he had been laid off three times since he received his M.B.A. degree from Fordham University in 2005. He pursued the degree at night while working for a record company because he thought it would enhance his prospects, he said.

“I did have a much rosier view of things when I got out of school than I have now,” Mr. Elrod said. “I was thinking that once I got out, I would have this on my résumé and basically have, if not my choice of jobs, at least some reasonable options. It hasn’t played out that way.”

In many ways, this recession resembles the deep downturn that began in 1989, “which was really the first white-collar-driven recession,” Mr. Hughes said. Then, too, there was a broad decline in employment in finance and related professions like law and accounting, he said.

At the same time, the telecommunications industry went through wrenching changes that transformed old-line phone companies into wireless and cable providers. Many of the managers and executives laid off in that recession found work again when the economy bounced back in the mid-1990s. That pattern could be repeated once this recession runs its course, he said.

“If you’re an accountant, a lawyer, some type of manager, you can adapt,” Mr. Hughes said.

Concerns about keeping those highly trained unemployed workers in the city drove the Bloomberg administration to create a retraining program for laid-off Wall Streeters and other professionals this year. With the city’s tax revenue dwindling as bonuses and big paychecks evaporate, city officials said they saw the need to encourage those people to start their own businesses or switch fields rather than wait for Wall Street to rebound.

Likewise, the state’s Labor Department plans to spend part of an emergency grant from the federal government to outfit an office in Manhattan to help white-collar workers search for new jobs.

But some laid-off professionals like Gary J. Ross say they expect to find new work on their own. Mr. Ross, 36, said he was one of about 90 lawyers dismissed on March 12 by Sidley Austin, a large firm with offices in several cities.

“It’s not a great time to be looking for work,” Mr. Ross said before heading to a midday showing of the movie “Adventureland” on Friday. “I know it’s not going to be easy, but I’m not in panic mode yet.”

A version of this article appears in print on , on Page A24 of the New York edition with the headline: This Time, Slump Hits Well-Educated, Too. Order Reprints|Today's Paper|Subscribe